Seeking to fast-track refund
to exporters of services, the Central Board of Excise and Customs (“CBEC”)
has fixed a scale of 80 per cent payment of the total amount claimed as refund.
CBEC vide Circular No. 187/6/2015-Service Tax dated November 10, 2015
clarified that once the refund application alongwith the necessary documents is
received, the jurisdictional Deputy/Assistant Commissioner will make a
provisional payment of 80% (eighty per cent) of the amount claimed as refund
within 5 working days (Public holidays are excluded while calculating the days)
from the date of receipt of the refund application along with all the necessary
documents.
After making the provisional
payment, the jurisdictional Deputy/Assistant Commissioner shall undertake
checking the correctness of the refund claim in terms of the relevant
notification and show cause notice (“SCN“) will be issued by him if in
his view the amount is inadmissible.
However, prior to the issuance
of such a SCN, the claimant may be intimated about the inadmissible amount so
that he has an opportunity to avail of the provisions of section 73(3) of the
Finance Act, 1994.
The move will speed up
sanction of the refund accumulated CENVAT credit to exporters of the services. It
is also clarified that the decision to grant provisional payment is an administrative
order and not a quasi-judicial order and should not be subjected to review.
Further, this payment of 80
per cent of the refund shall be purely provisional based on the relevant documents
submitted by the claimant and without prejudice to the department's right to
check the correctness of the claim in terms of the relevant notification.
It is pertinent to mention
here that this is only applicable to service tax refund claims filed under Rule
5 of the CENVAT Credit Rules, 2004 (CENVAT Rules) on or before March 31, 2015 and
which have not been disposed of as on date of the issue of this circular.
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